It is possible for a competitive firm that is maximizing profits in the short run to make its profits even bigger in the long run by expanding its plant, assuming that the product price stays the same.

Question

Quizplus · Accepted Answer

In the long run, a competitive firm can adjust all of its inputs, including expanding its plant size, to achieve economies of scale, reduce average costs, and potentially increase profits, assuming product price remains constant and demand is sufficient.

It Is Possible for a Competitive Firm That Is Maximizing